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Women and old-age poverty: We urgently need to start talking about money in relationships

Published April 19th, 2021

Over the course of their lives, women earn less than men on average – and live for longer. This means that they face a high risk of poverty in old age. So if it’s an equal relationship you’re aiming for, in which both partners take responsibility for each other, you need to start talking openly about money.

Equality also plays an important role when it comes to finances in relationships. There are still huge differences between the working careers of women and men, incomes included.

Or, in a nutshell: over the course of their lives, women earn less money on average. And live for longer. Not a good combination. That’s why the subject of money needs to be addressed if you want a fair and equal relationship. Especially if you’re planning on having children together.

Women, men and money – in figures

So what does that mean exactly? Here are a few facts...

Pension: Today, the pension of women over 65 is on average 46 % lower than that of men. This is because of the gaping differences in salaries, but also down to the fact that women in Germany are more likely to work part-time, which means that they collect fewer “pension points”. And also because they are still doing the lion’s share of caregiving work – a situation that has been exacerbated by the coronavirus pandemic. The average pension for women is currently 693 euros a month. If they don’t have an inheritance to fall back on, how is anyone supposed to live off that? A good question, to which there are sadly only bitter answers.

Why is this the case?

Gainful employment: Having children not only affects our personal lives, but also influences how much we (can) work. Especially in the case of mothers. Expressed in concrete terms: 93,6 % of fathers with children under the age of 18 work full-time, but only 33.8% of mothers do. If you don’t work full-time, then you’re going to need a very good salary if you still want to accrue a decent pension. But unfortunately that is a lot more difficult for women than it is for men.

Gender pay gap: The unadjusted gender pay gap means that women in Germany currently earn 18% less than men. And even when adjusted, the pay gap is still 6%. The unadjusted gender pay gap of 18% compares the average earnings of all employees. This highlights the structural problems, such as the fact that traditionally so-called women’s professions, like childcare and caregiving, are less well-paid. The adjusted gender pay gap takes into account the salaries in comparable positions with comparable activity.

Single parents: In 9 out of 10 cases, the single parent is the mother. And this is relevant here because single mothers face the biggest risk of falling into (old-age) poverty. On the one hand that has a lot to do with our tax system: married parents pay considerably less tax than parents who aren’t married and/or divorced. But also with a lack of childcare options, which makes it difficult for single mothers to work full-time. Or to even find a job in the first place.

What is the solution?

To rectify this imbalance between women and men quickly and in the long term, we need political solutions. That much is clear. But until they are finally in place, we as individuals should also be addressing the topic closer to home – starting in our relationships. By talking about how to make finances transparent for both partners, by working out a financial plan for the time you spend together, for your children, for your old age – and also a back-up plan in case you ever split up.

Taking responsibility for each other is important – and sexy too. So suggesting that money talk isn’t romantic isn’t really much of an argument.

Why not get started today?

Here you will find the 38 most important questions on the topic of finances in relationships that you and your other half should be asking each other.

And in our Short Guide we are giving you a quick run-through of how you can tackle the topic and draw up your first joint financial plan together. Read more here.

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